15. Evangelista & Co., Domingo C. Evangelista, Jr.
, that the plaintiff ever demanded that she be allowed to
Conchita B. Navarro and Leonarda Atienza Abad
Santos v. Estrella Abad Santos
DOCTRINE: It is not disputed that the provision against
the industrial partner engaging in business for himself
seeks to prevent any conflict of interest between the
industrial partner and the partnership, and to insure
faithful compliance by said partner with this prestation.
There is no pretense, however, even on the part of the
appellee is engaged in any business antagonistic to that of
appellant company, since being a Judge of one of the
branches of the City Court of Manila can hardly be
characterized as a business.
Partners:
1. Domingo C. Evangelista, Jr.
2. Conchita B. Navarro
3. Leonarda Atienza Abad Santos
4. Estrella Abad Santos
Facts: On October 9, 1954 a co-partnership was formed
under the name of "Evangelista & Co." On June 7, 1955
the Articles of Co-partnership was amended as to include
herein respondent, Estrella Abad Santos, as industrial
partner, with herein petitioners, the original capitalist
partners, remaining in that capacity, with a contribution of
P17,500 each. The amended Articles provided that
the contribution of Estrella Abad Santos consists of her
industry being an industrial partner
the profits and losses shall be divided and distributed
among the partners ... in the proportion of 70% for the first
three partners, Domingo C. Evangelista, Jr., Conchita P.
Navarro and Leonardo Atienza Abad Santos to be divided
among them equally; and 30% for the fourth partner
Estrella Abad Santos.
Respondent filed suit against the 3 other partners in the
CFI-Manila, alleging that the partnership, which was also
made a party-defendant, had been paying dividends to the
partners except to her; and that notwithstanding her
demands the defendants had refused and continued to
refuse and let her examine the partnership books or to give
her information regarding the partnership affairs to pay
her any share in the dividends declared by the partnership.
She therefore prayed that the defendants be ordered to
render accounting to her of the partnership business and
to pay her corresponding share in the partnership profits
after such accounting, plus attorney's fees and costs.
The defendants denied ever having declared dividends or
distributed profits of the partnership and denied likewise
examine the partnership books.
They alleged that the amended Articles of Co-partnership
did not express the true agreement of the parties, which
was that the plaintiff was not an industrial partner and was
merely a profit sharer entitled to 30% of the net profits.
Her share of 30% was to be based on the profits which
might be realized by the partnership only until full
payment of the loan (which it had obtained in December,
1955 from the Rehabilitation Finance Corporation) for
which the plaintiff had signed a promisory note as co-
maker and mortgaged her property as security.
They also claimed that respondent did not bind herself to
contribute her industry, and she could not, and in fact did
not, because she was one of the judges of the City Court
of Manila since 1954.
CFI ruled in favor of respondent CA affirmed the CFI
ruling. Hence, this petition.
Issue: Whether the respondent is an industrial partner.
Ruling: YES. One cannot read appellee's testimony
without gaining the very definite impression that, even as
she was and still is a Judge of the City Court of Manila,
she has rendered services for appellants without which
they would not have had the wherewithal to operate the
business for which appellant company was organized.
Article 1789 of the New Civil Code provides:
ART. 1789. An industrial partner cannot engage in
business for himself, unless the partnership expressly
permits him to do so; and if he should do so, the
capitalist partners may either exclude him from the
firm or avail themselves of the benefits which he may
have obtained in violation of this provision, with a
right to damages in either case.
It is not disputed that the provision against the industrial
partner engaging in business for himself seeks to prevent
any conflict of interest between the industrial partner and
the partnership, and to insure faithful compliance by said
partner with this prestation. There is no pretense,
however, even on the part of the appellee is engaged in
any business antagonistic to that of appellant company,
since being a Judge of one of the branches of the City
Court of Manila can hardly be characterized as a business.
Having always knows as a appellee as a City judge even
before she joined appellant company on June 7, 1955 as
an industrial partner, why did it take appellants many
yearn before excluding her from said company as
aforequoted allegations?
What has gone before persuades us to hold with the lower
Court that appellee is an industrial partner of appellant
company, with the right to demand for a formal
accounting and to receive her share in the net profit that
may result from such an accounting, which right
appellants take exception under their second assigned
error. Our said holding is based on the following article of
the New Civil Code:
ART. 1899. Any partner shall have the right to a
formal account as to partnership affairs:

(1) If he is wrongfully excluded from the partnership

business or possession of its property by his co-
partners;

(2) If the right exists under the terms of any agreement;

(3) As provided by article 1807;

(4) Whenever other circumstances render it just and

reasonable.

We find no reason in this case to depart from the rule

which limits this Court's appellate jurisdiction to
reviewing only errors of law, accepting as conclusive the
factual findings of the lower court upon its own
assessment of the evidence.
Dispositive: Judgement affirmed.